Summary:
Review of pre-dismissal arbitration award in terms of LRA s188.
Normal review test applies. Arbitrator’s
findings on merits
reasonable, but findings on sanction premature as parties had not yet
presented evidence on sanction. Award
upheld on merits but set aside
and remitted for hearing of evidence on sanction.

JUDGMENT

FOURIE AJ

Introduction

[1]This is a review application in which the
applicant (“the employee”) seeks to review and set aside
the arbitration award
of the third respondent (“the
arbitrator”), sitting in pre-dismissal arbitration proceedings
in terms of section 188A
of the Labour Relations Act 66 of 1995 (“the
LRA”).

[2]The employee was charged with misconduct by
her employer (Transnet), the gist of which is that she allegedly
disclosed confidential
information to a bidder in tender proceedings
that had not yet been finalised, in breach of various provisions of
Transnet’s
tender procedures and disciplinary code. The
employee denied having made any such disclosure.

[3]The parties consented to pre-dismissal
arbitration proceedings under the auspices of Tokiso, who appointed
the arbitrator to deal
with the matter.

Arbitrator’s
findings on sanction

[4]After hearing evidence on the merits, the
arbitrator issued an award in which he held that the employee was
guilty of the misconduct
complained of. The arbitrator then imposed a
sanction of summary dismissal.

[5]The common understanding between the
parties was that, in accordance with normal practice, the question of
merits and sanction would
be dealt with separately, with evidence and
argument in respect of sanction only to be dealt with in the event
of, and subsequent
to, a finding of guilt on the merits. The
arbitration proceeded largely on this basis, and while some witnesses
of the employer
mentioned factors relevant to sanction in their
evidence, no evidence was presented by the employee relating to
sanction. In the
replying submissions in argument, the employee’s
representative made it clear that the question of sanction was to be
dealt
with separately to and after a finding on the merits.

[6]Despite this clear understanding, the
arbitrator proceeded to consider the question of sanction, and even
went as far as listing
facts in mitigation allegedly submitted by the
employee, when the record indicates that no such evidence was
submitted.

[7]The review test to be applied is the normal
test for review of arbitration awards. See LRA s188A (8).

[8]In my view, the arbitrator, in determining
the issue of sanction despite it being clear that the understanding
between the parties
was that it would be determined separately, after
(and only in the event of) a finding of guilt, and after an
opportunity to present
evidence and submissions relevant to the
question of sanction, deprived the parties of a fair trial in this
regard, and that this
renders the award (in respect of sanction)
defective and subject to review.

[9]In its answering affidavit in the review
proceedings and in argument, Transnet proposed that the matter be
referred back to arbitration
on the question of sanction only. The
employee sought a review of the entire award, on various grounds. I
now turn to consider
whether the award in respect of the merits is
also reviewable.

Arbitrator’s
findings on the merits of the misconduct charges

[10]The key issue for determination was whether
the employee communicated to T-Net Systems (T-Net), a supplier to
Transnet who had submitted
tender bids for various contracts, that
its bids were to be rejected by the Tender Board as its BBB-EE
verification was not in
order.

[11]The employee was employed as a contract
manager (check) at Transnet’s Komatipoort depot. She was
involved in the tender process
in respect of certain tenders relating
to this depot. Aaron Mabena (“Mabena”) was managing the
tender process.

[12]The tenders in question were of some
urgency, and were due to be considered by the tender adjudication
board on Monday 27 February
2012. On Friday 24 February 2012, Mabena
informed the employee that she would need to come to his office to
sign an updated tender
recommendation, and that the results of the
bidding process had to be amended, as it had come to light that T
Net’s BBB-EE
verification was not in order, as its verification
company was not approved by the regulatory authority. This meant that
T Net’s
BBB-EE scoring would be reduced and the result was that
it no longer ranked first in the list of recommended bidders.

[13]Shortly after this information was
disclosed to the employee, Mabena received a telephone call from
Riaan Talma (“Talma”),
a director of T Net. Talma
informed Mabena that he had heard that T-Net’s bids were to be
rejected as a result of a problem
with its BEE accreditation, and
asked Mabena what could be done about it. T Net also contacted
Lungile Xaba (“Xaba”),
Mabena’s manager, later that
afternoon with the same query.

[14]This leak of information to a bidder in a
formal tender process, before the tender was determined or awarded,
had the result that
Transnet cancelled the process and began afresh,
because of the breach of tender procedures.

[15]Transnet appointed an internal investigator
who obtained statements from Mabena, Xaba, the employee and Talma.
Transnet then instituted
disciplinary proceedings against the
employee, accusing her of being responsible for the leak. The
employee denied having disclosed
the information to T-Net. This was
the central issue for determination by the arbitrator at the
pre-dismissal arbitration proceedings.

[16]The following facts were common cause or
undisputed:

16.1Shortly before noon on Friday 24 February
2012, Mabena informed the employee of the problem with T Net’s
BBB-EE accreditation,
and that she would need to sign amended tender
recommendation documents in which T-Net would no longer be reflected
as the top
bidder.

16.2At 12h09, the employee telephoned Talma.

16.3At 12h20, the employee sent an SMS to
Talma, with Mabena’s contact details.

16.10As a result of the disclosure of
information to a competing bidder prior to the completion of the
tender adjudication process, the
tender was put on hold.

[17]The inference that Transnet sought to draw
from the above facts, is that it is likely on the probabilities that
the employee disclosed
the information to Talma. The employee flatly
denied this, and presented an alternative theory to explain the
source of the leak:

17.1Talma stated that he received the
information from a T-Net employee, Lukise Mahlangu, who was visiting
Transnet’s Kilner Park
offices to check the notice board on
which tenders were communicated, and by chance overheard a Transnet
employee stating in a
conversation that ‘T Net Systems has been
rejected on some tenders, based on an assessment that our BBBEE
Certificate is
not SANAS underwritten, because the verification
agency is not accredited with them.’

17.2Talma then contacted the employee (as she
was T Net’s only contact at Transnet) to ask what the problem
was. The employee
stated that she was not allowed to provide any
information, and that T Net could take up the matter with Mabena or
his boss, Xaba,
and duly provided him with their contact details.

17.3The employee explained that the only reason
why she would have telephoned Talma at 12:09 or at any time earlier
than that would
have been to discuss other on-going projects of T Net
at Transnet, of which she was project manager. Telephone calls after
that
time could have related to providing Talma with the contact
details of Mabena and Xaba, and also following up with him as to
whether
Mabena had been able to assist him.

17.4The employee explained that she attended at
Kilner Park to meet with Mabena in order to obtain a gazebo for use
at an athletics
event over the coming weekend. She and Mabena were
active in the Transnet Athletics club, and Mabena had the key to a
store where
the gazebo was kept. She stated that Mabena told her
about the problem with T Net’s accreditation while they were
walking
through the foyer of the building.

17.5On the employee’s version, it was
thus probable that Mahlangu could have overheard the conversation and
obtained the information
that he then relayed to Talma. There were a
number of people in the foyer, and as she and Mabena were talking in
normal tones,
their conversation could easily have been overheard.

[18]Transnet submitted the following evidence
in support of its version of events, which was disputed by the
employee:

18.1Mabena testified that he told the employee
about T Net’s accreditation issue in a telephone call shortly
before midday, and
also asked her to come to his office urgently to
sign the amended tender recommendation documents.

18.2Mabena denied that he walked through the
foyer with the employee (or discussed the issue in public) –
his recollection was
that they met at the store to look for the
Gazebo.

18.3Mabena testified that when Talma called
him, he stated that the employee had provided him with the
information. Talma denied this,
and explained that he stated that the
employee had provided his contact details.

18.4Mabena testified that the employee
undertook to come and sign the amended papers later as she had to
attend to an urgent errand.
When he (in the presence of a colleague,
Dumisane Ngwetshe, who confirmed this) telephoned the employee later
that afternoon to
query when she would come in to sign the amended
documents, the employee complained that too much emphasis was placed
on BEE scores,
over contract price.

18.5The investigator, Siya Dayile (“Dayile”),
could find no evidence of Mahlangu having entered Transnet’s
Kilner
Park premises on that day. Although the systems are not
infallible, if Mahlangu had entered by vehicle (which Talma testified
to)
then it is likely he would have signed an access register at one
of the entrance gates.

18.6Transnet raised doubts as to whether T Net
employed a person of this name. Talma testified that Mahlangu was
employed at the time,
and did attend at Transnet, but could not
provide evidence at the arbitration, as he had been missing from duty
since April 2012,
and was presumed to be deceased. T Net did not
provide any documentary proof of Mahlangu’s employment, but
Talma testified
that such records were available.

[19] Faced
with these conflicting versions, the arbitrator was tasked with
assessing which version was more probable on the evidence
before him.
The arbitrator concluded that, on the probabilities, the employee had
made the disclosure to Talma. This was a matter
in which the
arbitrator was tasked with determining what the facts were, and in
doing so, had the ‘right to be wrong’.
See Dumani
v Nairand
Another2013 (2) SA 274 (SCA) at paras
26-33, Telcordia Technologies Inc v Telkom SA Ltd[2006] ZASCA 112; 2007
(3) SA 266 (SCA) at para 85. It follows that a court sitting on
review may not interfere with such findings unless the stringent
requirements
of the review test are met.

[20]In my view, this conclusion is one that a
reasonable arbitrator could have reached, on the evidence before him.
The award is justifiable
in relation to the evidence presented. It is
a finding on the probabilities, that one competing version of events
is more likely
than another. I am inclined to agree with the
correctness of the finding, as the version of Mahlangu overhearing
such a detailed
conversation at the very moment the key information
was being relayed, seems somewhat far-fetched to me. It seems more
probable
that the information was conveyed to Talma by the employee,
in the course of the telephone conversation with him, that took place
shortly after her telephone conversation with Mabena, and a few
minutes before Talma telephoned Mabena.

[21]A criticism directed at the award was that
the arbitrator placed greater emphasis on hearsay evidence than on
the direct evidence
of Talma and the employee. In my view this does
not constitute a reviewable irregularity, for the reasons stated by
Wallis AJ (as
he then was) in Naraindath
v CCMA and Others [2000] 6 BLLR
716 (LC) at paras 26 and 27. In Naraindath,
the arbitrator elected to take into account evidence presented at the
disciplinary inquiry in rejecting the veracity of a version
before
him. On review, the applicant complained that the arbitrator’s
conduct in basing the finding on hearsay evidence (which
was
preferred to direct evidence) amounted to a reviewable irregularity.
Wallis AJ undertook a detailed analysis of the duties
of arbitrators
in conducting statutory arbitrations in terms of the LRA, and held
that:

‘It
would stultify the entire purpose of the legislation if this Court
were, in the face of such clearly stated intentions, to insist
on
arbitrators appointed by the CCMA to resolve unfair dismissal
disputes conducting those proceedings in slavish imitation of
the
procedures which are adopted in a court of law and subject to the
technical rules of evidence which apply in those courts.
Such an
approach is in my view contrary to the express provisions of the LRA.
Section 138(1) is the decisive provision in this
regard. It empowers
the commissioner to conduct the arbitration in such manner that the
commissioner considers appropriate in order
to determine the dispute
both fairly and quickly. Lest the commissioner is under any
misapprehension as to what is required the
section goes on to direct
that he or she discharges his or her functions “with the
minimum of legal formalities.

In
my view it is perfectly clear in these circumstances that a complaint
that a commissioner has conducted proceedings in a way
which differs
from the way in which the same dispute would be dealt with before a
court of law cannot as such succeed…’.

[22]A further complaint was that the arbitrator
conflated the charges of misconduct, in that he failed to deal with
the two separate
charges in any meaningful way. In my view this does
not constitute a reviewable irregularity – the charges are
inelegantly
framed, but the key complaint in both is clear –
that the employee disclosed confidential information relating to a
tender,
to a competing bidder, prior to the tender being awarded. It
is clear from the award that the arbitrator considered this issue and
applied his mind to it, and reached a conclusion on it.

Appropriate relief

[23]In my view, the extent
to which such a disclosure contravenes tender rules or the code of
conduct (it is common cause that it would amount to misconduct),
and
the impact of the conduct on the trust relationship, can properly be
dealt with in an assessment of evidence and submissions
on an
appropriate sanction to be imposed.

[24]I do not think it would be appropriate to
set aside the entirety of the award on review, given that both
parties were allowed a
full hearing on the issue of whether the
employee made the disclosure, and my finding that the arbitrator’s
conclusion on
this issue is reasonable.

[25]This court has previously referred a matter
back to pre-dismissal arbitration for the hearing of evidence on
sanction only. See
Chetty v Transnet
Bargaining Council, Case JR 2668/11,
Unreported decision of the Labour Court (per Van Niekerk J),
delivered on 27 March 2013.

[26]I am not in a position to consider
substituting the decision on sanction, as the parties have not been
granted an opportunity to
present such evidence at arbitration.

[27]In terms of section 162 of the LRA, this
court has a broad discretion to make costs orders on the basis of the
requirements of law
and fairness. I am inclined not to make a costs
order. The employee enjoys partial success on review, in that the
award on sanction
is set aside, but this relief was effectively
tendered by Transnet in the answering affidavit in the review
proceedings. Accordingly,
in my view it would be fair not to make any
order as to costs.

[28]The following order is made:

28.1The arbitration award issued by the third
respondent under the auspices of the second respondent under case
number Tokiso 1444 is
reviewed and set aside only to the extent that
the award determines a sanction to be imposed on the applicant.

28.2The matter is remitted back to the second
respondent for an arbitrator other than the third respondent to
consider an appropriate
penalty to be imposed for the misconduct
found to have been committed by the applicant.

28.3The parties to the arbitration must be
given the opportunity to submit evidence and make submissions as to
the appropriate sanction
to be imposed.